White: RSN Surcharge Will Expand

But DirecTV Chief Says Only in Most Costly Areas1/08/2013 12:04 PM Eastern

By: Mike Farrell

DirecTV chairman and CEO Mike White said the satellite giant’s regional sports network surcharge will likely expand to a few additional markets in the coming year, but stressed the charge will only occur in its most costly markets.

DirecTV began implementing the $3 monthly surcharge in August for new customers in markets with multiple RSNs like Los Angeles and New York. At the Citigroup Global Internet, Media and Telecommunications conference in Las Vegas Tuesday, White said it would expand the practice in 2013.

“The average RSN, for most of America, is probably $3 or $4 in the bill and it’s not a big issue,” White said. “But there are metropolitan areas where it’s $18 or $20 [of a customer’s bill] because of the number of RSNs that you have to carry. Our view is you can’t price the same nationally, you have to be smarter about it. We did put in an RSN surcharge of about $2 or $3 for new customers. I think you will see us continue to expand that, primarily in the 20% of America where you’ve got regional sports costs that are out of control. I don’t see it as something you do 100% across the board. I think it’s more for those metropolitan areas where sports are, in my mind, fairly high-priced. You’ve got to do something to try to recoup that cost from the consumer.”